People familiar with the situation say Zimbabwe's security forces have sidelined the country's financial leaders and forced the government to shut down the stock exchange and stop most mobile-money transactions.
The Joint Operating Command, which came under pressure and stabilized the domestic currency on June 26, was created without notifying the central bank that controls the mobile-money industry that the Zimbabwean trade is almost done. He asked not to be identified as the role of the JOC was not publicly disclosed.
This measure is further evidence that senior ruling parties and military officials are becoming impatient over the administration of senior Emerson Mnangagwa. Inflation has risen to 786%, the currency has collapsed and the country is facing a shortage of food and fuel.
The JOC is comprised of military, police and secret service officers and is the highest organization in terms of state security coordination, but is generally not in financial matters. One of the people said that Finance Minister Mathuli Nekub and Central Bank Governor John Mangudia failed to take steps to resolve the crisis.
The country has military power and can have an impact on the government, and political analysts should not rebel. Military acquisitions in the region are rare - the military's attempt to assert power in Lesotho in 1997 led to a South African developmental community-backed invasion.
Defense Minister Napa Muchinguri, who chairs the JOC, was not immediately available for comment, and Bloomberg said a man answered his mobile phone when asked for comment. The government has denied the orders issued by the JOC.
Government spokesman Nick Mangwana said, "The order came from the government after taking input from all agencies and departments." "The evidence linking the mobile-money platform to money laundering and illicit foreign exchange trading and money creation has emerged."
Mobile money
Two people said they were not informed by central bank officials about the order when mobile money companies called on June 26. When Bloomberg was asked for comment on Tuesday, Managua did not answer his mobile phone or message with his assistant.
"It is not true that the Reserve Bank and the Ministry of Finance were not involved in the decision or were unaware of the consequences of the suspension," said George Guamtanga, the finance secretary, in a text message sent by mobile phone. "This is another adaptation of the work that the Financial Intelligence Unit is already working on, leading to a court ruling against one of the mobile operators."
EcoCash is Zimbabwe's largest mobile-money platform with over 10 million registered users, Econet Wireless Zimbabwe Limited Unit. The Zimbabwe Stock Exchange is privately owned. The last time it was stopped was in 2008, inflation rose by 500 billion and the Zimbabwe dollar was canceled the following year.
Mounting stack
The benchmark industrial index of the ZSE rose seven-fold this year, as stocks are used as a hedge against inflation. The mobile money was used to buy shares, which were taken out of the country, the Information Ministry said in a statement on June 26.
The JOC took action last year as the Zimbabwean dollar reopened after a decade, and the value of the black market fell to $ 100. This compares with the official rate of 57. Like last year, Zimbabwe is its currency equivalent to a greenback.
The main reasons for the controversy are the different rates that traders use to convert U.S. dollars into electronic money, which can reduce the value of the Zimbabwean currency.
This rate depends on whether funds are transferred to a mobile platform such as EcoCash or to a bank account, although some companies are known as the old Mutual Implied Rate. OMIR uses the difference between the prices of Old Mutual Limited Shares in the Zimbabwean and London Stock Exchange to predict the future rate of the Zimbabwean dollar.
The leader of the country's crisis has increasingly blamed the private sector as pressure mounted on the Manganagua administration that succeeded longtime ruler Robert Mugabe in 2017 following the military coup.
“The private sector is constantly under attack by our high-cost models,” the ruling party's Politburo conference said on June 10. "We are fully aware that this is a war triggered by our political opponents, elite opportunists, and malicious individuals. They are expected to pursue a vicious agenda they will never win."
The International Monetary Fund estimates that the economy will contract by 10.4% this year.
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